Ljubljana - Retail group Mercator posted a net profit of EUR 10.6 million in the first half of the year after reporting a loss of EUR 69 million in the same period a year ago due to property revaluation and writedowns. Sales revenue was down 0.4% to EUR 1.1 billion.

Releasing the semi-annual results on Thursday, Mercator said despite the slight decline in sales revenue, the figure is up 3.9% from the comparable pre-Covid period two years ago.

Retail sales revenue was down 1.3% compared to the first half of 2020 to EUR 849.8 million, which is still 7.3% higher compared to the first half of 2019.

Despite the Covid-19 restrictions, the retail group saw its normalised earnings before interest, taxes, depreciation, and amortization (EBITDA) increase by 11.1% to EUR 92.4 million.

Operating profit (EBIT) amounted to EUR 40.4 million, which compares to roughly equal amount of loss in the first half a year ago.

"In order to alleviate the negative effects of the Covid-19 epidemic, Mercator introduced a number of optimisation and cost-efficiency activities and initiatives, which fully neutralized the negative effect of the drop in revenue due to the epidemic," CEO Tomislav Čizmić was quoted as saying, pointing to the growth in normalised EBITDA.

He said that Mercator had also taken "a big leap forward in terms of digitalisation and personalisation of offer".

The group had a net financial debt of EUR 558.2 million as of the end of June, which is down 5.1% from the end of June last year. Meanwhile, total financial liabilities increased by EUR 23.7 million from the end of 2020, which is mostly a result of partial increase of the super senior loan.

Capital expenditure amounted to EUR 13.6 million, of which 71.1% was spent on investments in Slovenia. Investments into refurbishment of existing stores accounted for 54.2% of total investments in the period.

In April Mercator was moved to the Croatian Fortenova group, which took over from the bankrupt conglomerate Agrokor.